HONG KONG, Aug 28 (Reuters) - Hong Kong shares are set for a third-straight loss on Tuesday, dragged lower by weakness in growth-sensitive sectors in lacklustre turnover, as investors mark time ahead of a meeting of central bankers later this week.

Strength in defensive sectors such as Hong Kong utilities and Chinese telcos underlined investor caution, with the Hang Seng Index barely holding above its 200-day moving average, a key long-term chart level. A finish below that level could point to further weakness ahead.

Mainland Chinese markets were also weaker, with the Shanghai Composite Index flat at midday. The CSI300 of the top Shanghai and Shenzhen listings slipped 0.2 percent to its lowest level since March 2009.

The Hang Seng Index shed 0.2 percent to 19,766.1, barely holding above its 200-day moving average, now at 19,765.2, a technical level it has closed above on all but one session since July 31.

"Everybody is playing a waiting game now. Even if they are in the market, it's with a very short time horizon and in stocks that are more defensive," said Larry Jiang, chief strategist with Guotai Junan International Securities.

China Life Insurance, the country's largest insurer, fell 1.2 percent to its lowest in almost two months in Hong Kong ahead of its first-half corporate earnings later in the day.

Warren Buffett-backed Chinese automaker BYD Co Ltd slipped 1.5 percent after posting a 94 percent drop in first-half earnings, underperforming most of its rivals as sales sagged and its solar energy business lost money.

BYD has fallen 22 percent in 2012, compared with a 7.2 percent gain for the Hang Seng Index and a 4.5 percent loss for the China Enterprises Index, made up of the top Chinese listings in Hong Kong.

Foxconn International Holdings Ltd (FIH), the world's biggest contract maker of cellphones, dived 6.3 percent after posting its worst-ever first-half net loss due to dismal orders from key clients such as Nokia Oyj hit by the economic slowdown.

STEEL SECTOR LIMITS LOSSES

Baoshan Iron & Steel, China's largest listed steelmaker, surged the maximum 10 percent in Shanghai after the company announced plans to buy back up to 5 billion yuan worth of shares to boost investor confidence.

This move makes Baoshan among the first to answer a call from the China Securities Regulatory Commission on Aug. 1 for companies with a strong capital base to buy back their shares in one of several moves intended to boost market sentiment.

Baoshan is still down almost 8 percent for the year to date, compared with a 5 percent loss on the CSI300 Index and a 6.5 percent loss for the Shanghai Composite Index. Baoshan shares fell in value in 2010 and 2011.

Baoshan's strength spurred gains for the Chinese steel sector in mainland markets, where stock prices have come under pressure this year as the sector struggles with high inventories amid China's slowing economy.

Angang Steel rose 2.3 percent in Shenzhen, shrugging off a $311 million first half net profit it posted late on Monday. The company had issued a profit warning on July 6.

Angang slipped 0.5 percent in Hong Kong, where it is still down more than 30 percent this year.

Deutsche Bank analysts said with no sign of recovery for the steel industry, Angang's stock was not attractive, noting the book value of the company "might continue to shrink". (Editing by Richard Pullin)